Transaction Processing

Systems
• Manual or automatic – all businesses
systematically process transactions
• Function: process routine, day-to-day
business activities
• Computerized TPS:
– Batch
– Online (real-time, OLTP)
• The foundation of business systems
MIS 175 Spring 2002 Chapter 9 1
MIS 221
 Batch TPS
• Originally, the only available option
• Transactions accumulated over period of time
• Time period – day, week, month
• Transaction records accumulated in files
• When batches are processed, what happens?
– Update databases
– Generate reports
– Generate transactions for other systems

MIS 175 Spring 2002 Chapter 9 2

MIS 221
 Batch Processing Pros and
Cons
• Pros
– Relatively easy to program, install and
maintain
– Batches can be processed during low-activity
periods
• Cons
– Information is delayed

MIS 175 Spring 2002 Chapter 9 3

MIS 221
 Online TPS (OLTP)
• Transactions are processed in real time
• Required for any “modern” application
where time is critical
• Well supported by client/server computing
model

MIS 175 Spring 2002 Chapter 9 4

MIS 221
 Hybrid TPS
• OLTP applications can feed transactions
to batch systems
– Examine: GL only updated once per day
• Real time order capture with delayed
processing

MIS 175 Spring 2002 Chapter 9 5

MIS 221
 TPS Requirements
• Capture, process and store transactions
• Produce reports and information about
transactions
• Produce transactions for other TPS
• Be accurate and timely
• Be efficient – require less labor
• Increase customer service
• Increase competitive advantage
MIS 175 Spring 2002 Chapter 9 6
MIS 221
 TPS Activity Model
• Data capture
– From online entry or “external” system
• Data validation
– Should be done as close to source as possible
• Processing
– Data manipulation
– Database updating
– Generation of transactions for other systems
• Archive Transaction
• Create documents and reports
MIS 175 Spring 2002 Chapter 9 7
MIS 221
 Management Issues
• Uptime
– How long can the system be “down” before
significant costs are incurred?
• Processing Delays / Response Times
– How quickly must a transaction be
processed?
– What is the worst online response time that is
acceptable

MIS 175 Spring 2002 Chapter 9 8

MIS 221
 Management Issues (2)
• Disaster Recovery
– What plans are in place to recover lost
business data?
– What plans are in place to resume business
processing in case of disaster?
• Audit
– Can you verify the integrity of the system?
– How will you know if transactions are not
processed or are processed incorrectly?
MIS 175 Spring 2002 Chapter 9 9
MIS 221
 TPS By Function
• Order Processing
• Procurement & Inventory Control
• Accounting

MIS 175 Spring 2002 Chapter 9 10

MIS 221
 Order Processing TPS
• Order capture
– Variety of means
• Configuration
• Shipment planning and inventory
allocation
– Prioritize orders, select shipment locations,
allocate inventory to orders
• Shipping and warehousing
– Picking, packing, invoicing, reporting
MIS 175 Spring 2002 Chapter 9 11
MIS 221
 Procurement
• Inventory Control
– Raw materials, WIP, FGI, etc
• Purchase Order Processing
– Generating, transmitting, maintaining
purchase orders
• Receiving
• Accounts Payable
– Boundary between procurement and
accounting
MIS 175 Spring 2002 Chapter 9 12
MIS 221
 Accounting
• Accounts Payable
• Accounts Receivable
• Budget
• Payroll
• General Ledger
• Asset Management

MIS 175 Spring 2002 Chapter 9 13

MIS 221
 Disadvantages of Functionally
Organized TPS
• Processing inefficiency
• Data redundancy
– Causes integrity problems
– Inefficient
• Temporal integrity problems
– Caused by different times at which processing
occurs
• Lack of information coherence
MIS 175 Spring 2002 Chapter 9 14
MIS 221
 Enterprise Resource Planning
Systems
• Key word is Enterprise: solution
designed for entire enterprise
• All processes organized around one
enterprise-wide data model

MIS 175 Spring 2002 Chapter 9 15

MIS 221
 Advantages of ERP
• Elimination of costly legacy systems
– Old systems are expensive to maintain and
reduce business agility
• Improvement of processes
– ERP may have implemented best-in-class
processes
• Improve data access and data integrity
– Provide complete, consistent view of
enterprise data

MIS 175 Spring 2002 Chapter 9 16

MIS 221
 Disadvantages of ERP
• Implementation cost
– Software and hardware
– Expertise
– Opportunity costs
• Time to implementation
– Lengthy and difficult process
• MOC (management of change) challenges
• System integration difficulties
• Vendor dependence
MIS 175 Spring 2002 Chapter 9 17
MIS 221
 Current ERP Vendors
• SAP
• Baan
• PeopleSoft
• Oracle
• J. D. Edwards
• Manugistics

MIS 175 Spring 2002 Chapter 9 18

MIS 221
 R/3 Architecture
• Functionally rich
– More functional options than a business will
ever need
• Logical
– Built around information model
– 10,000 tables
• Control tables
• Application data tables
– Heavily parameterized
MIS 175 Spring 2002 Chapter 9 19
MIS 221
 R/3 Architecture (con’t)
• Hardware
– PC Clients
– Application server
– Database server
• Public interfaces
– BAPI
• Customization
– ABAP Development System
MIS 175 Spring 2002 Chapter 9 20
MIS 221